Next shock will be high food prices

The Sydney Morning Herald (Link) - Paul Sheehan (January 17, 2011)

You will pay for all this water. Unless you are insulated from the normal costs of living, you can expect sticker shock at some point this year, or next, when paying for the weekly food shopping. We�ve had oil shocks. Prepare for food shocks.

Ten years ago, the United Nations Food and Agriculture Organisation�s composite world food price index stood at 92. For the month of December it was 215.

The most expensive year on record was 2008, when 60 million people slid into poverty because of higher food costs. There were food riots. Over the past three months, the trend in the FAO�s food price index was worse than 2008.

Then there are energy prices. Australia is the world�s biggest coal exporter and Queensland is a big part of that. The armada of empty coal ships sitting off the Queensland coast is already flowing into higher coal prices in Europe.

This is in addition to the pressure on the price of oil coming from increased demand from China and India. Oil is again flirting with the $US100 per barrel threshold; bad news, given that almost everything in the modern economy is dependent on oil, directly or indirectly, especially the cost of fertiliser and transport - and thus food.

Australia is addicted to fertiliser - to compensate for declining soil fertility - and transport, thanks to an absurdly centralised food distribution network. The idea of growing and consuming food locally is a largely alien concept to Australia�s supermarket oligopoly.

So despite the efficiency of the farmers - the most competitive and least protected in the world - local food prices are already inflated by the high cost of transport, the high cost of land, the high cost of planning laws, the premiums on prime retail space and the rent-gouging that this entails.

We were living with an inter-connected global food supply system, with shrinking fertile ground and increasing global demand, even before the great leveller - the weather - threw its weight around in what may be the largest inundation in Australia�s recorded history, with simultaneous flooding in Queensland, NSW, Victoria and Tasmania.

Which brings us, inevitably, to climate change. Ocean temperatures are rising. Warmer oceans feed rainfall. According to the CSIRO, sea surface temperatures around northern Australia are much higher than average and the La Nina weather system has been cooking up storms.

Climate alarmists have predicted an increase in intense and disruptive extreme weather. So whether it is dry or wet, drought or flood, this is treated as vindication by those who believe that humanity can change the global weather.

Because this subject has attracted such religiosity, I am drawn to rigorous technicians and sceptics like David Evans, who used to work for the CSIRO and now runs his own consultancy. He has a sophisticated grasp of computer modelling and loves to challenge the more zealous claims made within the climate debate. The Queensland floods have provided him another opportunity.

�The weather of Australia�s east coast is mainly determined by the Pacific Decadel Oscillation,� Evans told me. �The PDO has two phases, each about 24 to 30 years; it�s a bit irregular. In the warm phase, the global temperature goes up, there are more El Ninos than La Ninas, and eastern Australia has more droughts and fewer floods.

�By the end of the warm phase the soil is dry and the worst droughts occur. The last warm phase started around 1975 to 1977 and seemed to have finished sometime between 2001 and 2007.

�In the cool phase, the global temperature goes down, there are fewer El Ninos than La Ninas, and eastern Australia has more floods and fewer droughts. The latest cool phase started definitely by 2007, so there will be global cooling for the next 20 years or more. Because the world has been in a warming trend since 1690, the global cooling will probably be slight, unless that larger warming trend is fading.�

He points out that southern and central Queensland have experienced big floods in 1893, 1974 and 2011. The 1893 floods were apparently even larger than today, long before global warming.

At the other extreme of my respected contacts is Michael Mobbs, the creator of the �sustainable house� in Chippendale. He believes Australia is getting environmental blowback from its massive coal exports: �With every shipload of coal we send overseas � our coal comes back to Australia in the form of storms, dying crops and droughts. Coal digging and burning causes climate change. It causes massive amounts of carbon dioxide pollution. Australia digs and sells more coal than any other country on earth.�

The floods will thus provide food for thought about deep trends. Few people outside the Greens would agree with Mobbs�s desire to end all coal exports but, in another way, he has started something less drastic and more attainable that would help abate food shock: tapping the potential of our mostly urban population to grow more of its own food.

Backyard gardens. Planting fruit trees and other edibles in common areas on street fronts. Chicken coops. Mobbs already has a successful pilot scheme in his own street, Myrtle Street, Chippendale, and the City of Sydney is looking at adopting similar measures.

Grow local. Buy local. Eat local. The market gardens around Sydney are precious resources that need to be preserved from further obliteration by housing development. Rethink the back yard and the front street. Because food shock is coming. �